Kenya has Great Potential to Become East African Auto Industry Hub

Posted on :Friday , 28th August 2020

The automotive industry is recognized as an important contributor to Kenya’s manufacturing pillar under the Big Four agenda, which is anchored in Vision 2030, Kenya’s long-term development blueprint in which industrialization and economic transformation are crucial goals.

This backdrop highly controlled the development of the National Automotive Policy by the Industrialisation ministry in 2019. Not many are aware of the history of Kenya’s automotive sector. 

The automotive policy focuses to guide the domestic industry in achieving competitiveness in the automotive sector as part of Kenya’s jobs agenda. Initiatives over the next 12 years will support motor vehicle and motorcycle assembly, local components and parts manufacturing, market access, mostly to public sector procurement, and cross-industry collaboration on innovation, research and technology.

On Friday, August 21, Proton Holdings Bhd, Malaysia’s national automotive corporation, declared its entry into the Kenyan market with the first batch of 30 units of completely knocked down kits of flagship automobile offering, the award-winning Proton Saga. The vehicles will be assembled by Proton’s local partner Simba Corporation.

As a matter of comparative history, the Proton Saga was first conceptualised as Malaysia’s “national car” in 1979, built through strong public-private partnerships and is today, Proton’s best-selling car model. 

It is believed that Proton’s entry into the country is not just as an entry into a market of almost 51 million Kenyans but a gateway to the East African Community’s 200 million people, the 500 million Africans in continent’s “Eastern Seaboard’ and, potentially, Africa’s 1.3 billion people.

Nairobi is Proton’s second African market foray, after Cairo in Egypt.

As a potential East African automotive hub, Kenya brings several comparative advantages to the table: relative political stability, a sizeable middle class and progressive business environment, regional market access and a solid history of automotive assembly.

Lower taxes, import substitution, foreign exchange savings, technology transfer, local parts manufacturing and content and value chain development beyond sales and after-service are immediate advantages Kenya will pursue, with a clear view of previous experiences and challenges. Beyond job creation, we must think about easier car ownership and innovative e-business models (e-taxis) too.

This great development also demonstrates how Kenya’s economic diplomacy agenda actively helps in transformation goals. Today, it is the automotive sector, tomorrow it will be other areas of trade and development cooperation, as we have encouraged our friends and counterparts in Malaysia.


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